potentially pass it on to others. Therefore, the chance of catching the flu decreases for everyone, even those who do not purchase a flu shot. This is an example of a positive externality. The graph contains the private demand curve (D1) and the supply curve. D1 does not take into consideration the social benefit of people getting flu shots. Graph the social demand curve by placing the end points of D2 at the correct locations. Then, indicate the dead weight loss to society by placing the DWL triangle in the correct location on the graph. The Market for Flu Vaccinations • D2 (marginal social benefit) A DWL supply D1 (marginal private benefit) Quantity of flu shots Price ($)
potentially pass it on to others. Therefore, the chance of catching the flu decreases for everyone, even those who do not purchase a flu shot. This is an example of a positive externality. The graph contains the private demand curve (D1) and the supply curve. D1 does not take into consideration the social benefit of people getting flu shots. Graph the social demand curve by placing the end points of D2 at the correct locations. Then, indicate the dead weight loss to society by placing the DWL triangle in the correct location on the graph. The Market for Flu Vaccinations • D2 (marginal social benefit) A DWL supply D1 (marginal private benefit) Quantity of flu shots Price ($)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter30: Market Failure: Externalities, Public Goods, And Asymmetric Information
Section: Chapter Questions
Problem 10QP
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Question
Transcribed Image Text:The market for seasonal flu shots is depicted in the graph. As more people receive flu shots, fewer people catch the flu and
potentially pass it on to others. Therefore, the chance of catching the flu decreases for everyone, even those who do not purchase
a flu shot. This is an example of a positive externality. The graph contains the private demand curve (D1) and the supply curve.
D1 does not take into consideration the social benefit of people getting flu shots. Graph the social demand curve by placing the
end points of D2 at the correct locations. Then, indicate the dead weight loss to society by placing the DWL triangle in the
correct location on the graph.
The Market for Flu Vaccinations
D2 (marginal soeial benefit)
DWL
supply
D1 (marginal private benefit)
Quantity of flu shots
Price ($)
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